Consumer Corner: Time running out for states to control their insurance exchanges

No matter how loudly Republicans maintain they're going to repeal healthcare reform, with the U.S. Supreme Court decision on its constitutionality behind us, it's time for states to begin implementing one of the law's signature provisions: setting up insurance exchanges for those who have to buy health insurance on their own.

Polls indicate Americans still are leery of the law, which already has benefited young adults by allowing them to remain on their parents' plans through age 26 and those with pre-existing conditions who can now get coverage.

The latest poll from the conservative-leaning Rasmussen Reports finds 55 percent of those queried want the Affordable Care Act repealed while 39 percent want it kept in place. A Gallup Poll released last month finds 46 percent of those queried think the law will hurt the economy while 37 percent say it will help.

The Republican-controlled House has voted dozens of times to repeal healthcare reform, sending the bills to oblivion in the Senate, which is controlled by Democrats.

Hoping for a GOP landslide in November, a number of states under Republican control have been dragging their feet on setting up their own state exchanges, which the ACA requires to be operating by Jan. 1, 2014. If states don't act, the federal government will step in. States have until Nov. 16 to notify the federal government whether they will be setting up their own operations.

Former U.S. Sen. Bill Frist, R-Tenn., a heart surgeon, takes issue with the Republican intransigence, saying the exchanges have great potential. Besides, he said in a blog post on The Week, they were a Republican idea in the first place.

"As a doctor, I strongly believe that people without health insurance die sooner. Sure, they can eventually go to an emergency room. But it is often too late. They wait longer to get a breast lump checked out. They wait until their nagging cough turns into a fulminant pneumonia. They skip preventive care and then show up to the ER with severe, costly, late-stage symptoms that are harder and more expensive to treat," Frist wrote.

"State exchanges are the solution. They represent the federalist ideal of states as 'laboratories for democracy.' We are seeing 50 states each designing a model that is right for them, empowered to take into account their individual cultures, politics, economies and demographics. While much planning has yet to be done, we are already seeing a huge range in state models. I love the diversity and the innovation."

Texas Gov. Rick Perry, who was unsuccessful in his quest for the GOP presidential nomination, has made clear his state's decision.

"Neither a 'state' exchange nor the expansion of Medicaid under the Orwellian-named [Patient Protection and Affordable Care Act] would result in better 'patient protection' or in more 'affordable care.' What they would do is make Texas a mere appendage of the federal government when it comes to healthcare," he said in a letter to Health and Human Services Secretary Kathleen Sebelius.

On the other side Democratic Gov. Steve Beshear of Kentucky issued an executive order establishing a state exchange immediately after the Supreme Court decision, WellPoint, the nation's largest Blue Cross Blue Shield plan, bought Amerigroup in preparation for dealing with exchanges and Minnesota let a $41 million contract to MAXIMUS, a Virginia company, to design and develop a consumer-friendly Web site for the state's health insurance exchange and to modernize its Medicaid operations. New York Gov. Mario Cuomo was even quicker, establishing New York's exchange in April.

Two states that have been operating health insurance exchanges for a while -- Massachusetts and Utah -- represent different models that can serve as templates for other states, a report by the Robert Woods Johnson Foundation said. Massachusetts established its exchange in 2006 and Utah set up its exchange in 2008.

The Robert Woods Johnson study found states must "balance between establishing consumer protections and making the exchange attractive for plans. Many experts have observed a dichotomy between exchanges that act as an active purchaser and those that serve as a market organizer. The Massachusetts' and Utah's experiences demonstrate that whatever the strategy, exchanges must be attentive to the needs of both consumers and insurance carriers."

The Charlotte (N.C.) Business Journal reported last week 13 states have said they will operate their own exchanges and 20 others have taken the first steps toward creating their own.

Farmers, perhaps the most independent of U.S. small businessmen, have the most to gain from healthcare reform, the Wisconsin Farmers Union said in a recent op-ed piece published by the Madison Capital Times.

"They often pay way too much for terrible coverage. Some are uninsurable because of the high-risk nature of farming. Many can't pay high premiums for the current system of individual and family coverage," he said, adding that insurance exchanges would broaden the risk pool, making coverage more affordable.

Republican Gov. Scott Walker of Wisconsin, who survived a recall in recent months, has been nearly as vocal as Perry in his opposition to the exchanges, refusing to take any action before the November elections.

In Idaho, Insurance Director Bill Deal warned last week the state is running out of time, despite a $20.4 million federal grant secured last year for the planning process. Deal told lawmakers the state should consider a partnership exchange with the federal government rather than move ahead on its own.

"So many states are considering this partnership thing as a way to get started, a way to fund an exchange, and then down the road, 2015, 2016, they can put together an exchange, move in a different direction, go with a state-based operation," McClatchy-Tribune Information Services quoted Deal as saying.

In Ohio, Republicans have blocked all forward movement on the issue as well, despite an Ohio Health Issues Poll indicating the number of state residents getting insurance from their employers or a spouse's employer has fallen from 64 percent to 53 percent since 2006.

Michigan House members also are dithering, holding hearings to determine costs involved and whether the exchanges would actually result in more affordable care and address access issues. The Senate already has passed an exchange measure and Republican Gov. Rick Snyder has urged the House to act so the state does not have to give up control to Washington. Still the House is resisting.

"People are entitled to their opinions, but not to their own facts," Health and Human Services Secretary Kathleen Sebelius said last month. "And the facts in this case are clear: Since the Affordable Care Act was passed, national health spending is rising at a slower rate, health insurance premiums are rising at a slower rate, small-business coverage is holding steady and Medicare is on a stronger financial footing."

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